good morning, everybody. welcome to "squawk box" here on cnbc. president obama and mitt romney now have about 15 hours until they take the debate stage at the university of denver. >> people want to know who's going to win? who's going to score the punches? in my view, it's not so much winning or losing or even the people themselves, the president and myself. it's about something bigger than that. >> no, no, governor romney, he's a good debater. i'm just okay. but what i'm most concerned about is having a serious discussion about what we need to do to keep the country growing. >> a new nbc news "wall street journal" poll finds that nearly four in ten voters say that the upcoming debates will be either extremely or quite important to determining their vote for president. another 34% of voters polled say that the upcoming debates will be somewhat important to their

votes, so the stakes are high tonight. president obama's lead in the nationwide polls is narrowing. meantime, romney has pulled even in florida. john harwood is in denver this morning and he will join us in just a few minutes with the other poll numbers and see just exactly how close it is. then we're going to try our own debates. at 6:30 eastern time, we have strategists from both sides of the aisle. democrat jimmy williams versus republican joe watkins. an hour later, former dnc chair and vermont governor howard dean is facing off against ed conard. irene rosenfeld, the ceo of mondolez international. the markets aren't to be forgotten. at 8:30 eastern time, we will be joined by jim grant. we're going to talk about the best investing strategies for the rest of the year with him.

first, let's get you up to speed on this morning's headlines. over to andrew. friday we'll get the government september jobs report. could be a game changer for the election. we'll get a hint of what may be to come. the employment report coming at 8:15 eastern time. poll forecasters say the economy likely added 155,000 private payroll jobs this month. we'll bring you the number and get you instant reaction from joel prakken. in corporate news, richard schultz is pressing forward with a possible $11 billion buyout of the retailer. schultz and at least four private equity firms have reportedly started examining the books of the economy. at the same time, he is said to be negotiating individually with the pe firms on the details of how his roughly 20% stake in the company would contribute and what role he might be playing after a buyout. and oracle ceo larry ellison says the company won't be making any major acquisitions during the next couple years. in an interview on "closing

bell" yesterday, ellison said he is instead focused on growing organically. he also discussed the dividend. >> that's the decision of the oracle board of directors. i believe we'll gradually increase the dividend as opposed to dublg it or tripling it all at once. nothing dramatic. >> shares of oracle during the last year, take a look at it. 31.65. he's gotten close to the top there, joe. >> all right, andrew. thank you. my stories don't deserve that music? okay. thank you. you know what? i'm so nervous now and unsettled, i don't know what's coming. >> we've been working on new music, trying to find new things -- >> those drums, though. i'm so nervous about what's coming. iswhatoming during the show? is it the debate? is it the employment report?

is it 2012? >> i thought this music was -- last week, i made an error. i thought this music was the nfl music. >> no. >> it might be this -- >> china's normally robust services weakened -- >> that's the nfl. >> we've been working with it. we've been working to try and find -- if you read for a minute and a half and there's nothing underneath you, it sounds a little flat. now you're blowing the whole thing that we're trying to do. >> i'm so unsettled at this point. i'm so nervous about whatever's coming. >> i'm going to get silence. >> did we pay the same consultants for this music that we got from mondolez international? >> this was self-done. >> oh, sorry. sorry. wouldn't want to mess that up. china's -- china's normally

robust services sector weakened sharply this month to its lowest point since november of 2010. >> my fault. i asked for music. >> it's forboding. >> you're supposed to build tension and you're knocking it all down. >> the index suggests slow growth in manufacturing is finally beginning to feed through to the rest of the economy. >> different music if the news is good? >> i don't know, is the news ever good? why would we report it? why would we report it if it was good? >> touche. >> a small chinese firm -- okay, maybe it's this. oh, okay. this is like coming right off the ticker tape. this just came to me. this is just in. a small chinese firm is suing president obama for squashing its bid to build wind farms close to a naval training site in oregon. experts say the suit is a long shot for a firm that greatly underestimated u.s. suspicions about chinese intention. owned by two chinese nationals

and the company was installing wind turbines close to military training sites. the facility is used to test unmanned drones, and we know how controversial that whole program is. it's a highly sensitive u.s. technology. and carlisle group is entering the commodities business. the pe firm bought a majority stake in a commodities trading hedge fund major. carlisle has been diversifying in other alternative classes. >> does this work for you, the ticker? >> just sounds like it's really up to the minute. >> it feels newsy. >> it's really up to the minute. >> this is my fault. i actually asked for this. >> well, i'm glad that you admit your fault. you didn't pick the drum music. >> no, but we've been playing around with different musics. >> it's not really fault if they -- i don't know what kind of music fits with -- >> you want something. otherwise you talk for a minute and a half, two minutes with

nothing. >> i like that. at least i don't feel like my blood pressure -- >> you put people to sleep if they play this. this is what they play in spas. >> no, the stories are putting them to sleep. >> the delivery. here we go. let's get a check on the markets this morning. yesterday, the dow did close down, the s&p was slightly higher. >> all coldplay all the time. >> dow jones futures are up by about 15 points. s&p futures by about one and three quarters point this morning. in europe, you'll see -- keep going. >> i like that. >> just going to make my own sound effects. >> that was anchor ready. that was good. >> you'll see that the ftse and the dax are just slightly higher. in france, the cac went higher as well. those are slight moves. we are waiting for those important jobs numbers, at least in terms of the signaling from the adp. that should be something that

sets the tone for the market today. also take a look in asia. overnight, the nikkei ending down by about 39 points. you did see green arrows. bombay up about 48 points. oil prices at this point are down to 51 cents, 91.38. the ten-year note right now yielding 1.615%, so the yield is getting pressured even further at this level. the dollar this morning, currency markets, the dollar is down against the euro. and up against the yen. gold prices up by about $5. 1,780. we might get to 1,800. within striking distance. >> yeah. it's still your read. >> oh. i was looking at the pictures. right now it's time for the global markets report. i will explain to you what happened. this is all jim cramer's fault. we had a total war at 2:30 in the morning. >> that makes no sense. you might have an excuse. he's not nursing, right?

>> no. >> not that we know of. >> i got up at 4:30 and was tweeting yesterday and i couldn't believe he beat me. he challenged me at 2:30. i thought i won. anyway, karen is standing by in lond london. good morning. >> good morning, becky. 4:30, that sounds like a sleep-in to me over here. let's take a look at the numbers across the charts, because as we move throughout the morning session, we're looking at some of the green matching up to the red. the european markets trying to trim some of their losses. we had selling right across the european indices. but now looking a little bit better. not a hunl rge run at this stag but a little more encouraging. the ftse here in the uk up a tenth of a percent. we had our own challenge on the services side today. the market has managed to shrug off. i want to show you the share

price under a little bit of pressure. this is one of our major supermarket chains here, but it's also been trying to make a foray into the u.s. those numbers are just not encouraging. it's been open since 2007 and is still yet to show a profit. the numbers today, you can see the extent of that story. there is a selldown in the stock. the dax is up .3 of a percent. the ibex, 35. decent performance considering the fact that we had some worse economic news again. we saw that corporate tax has dropped by about a third from precrisis levels, basically small businesses are just not growing in this environment and big businesses are chasing profits abroad. so the government is just not getting the tax take on that front. in the asset classes, you can see some of the levels not that good at the moment. bundes still attracting a lot of

attention. we've been waiting on spain to fishlgly l-- officially ask fo that aid. nonetheless, we're not seeing too much pressure on the periphery, 5.75%. let me send it back to you. >> thank you very much. the first presidential debate. john harwood is on the ground in denver. he joins us with the latest nbc news "wall street journal" poll. it looks like things are starting to even out at least a little. is this the bounce that president obama got after the democratic convention coming back down? >> well, i think it's the bounce from the convention and the surge that he got on top of the convention with that 47% video, so there is some good news for romney. not only our national poll, but also in the swing state polls that we do with "the wall street journal" and maris college.

take a look at the numbers. first of all, on the national basis. president obama among likely voters leads by three points, 49 to 46. that's down from a five-point edge that he had in our poll just about three weeks ago. if you also look at the nbc "wall street journal" maris swing state polls, he's pulled even with president obama in the state of florida. that's the biggest swing state, 29 electoral votes. if you go then to virginia, he's also pulled within two points in virginia. he had been down four or five before. the bad news for romney in these three polls is that in ohio, a state that is critical, romney strategists think they have to win florida and ohio to get to 270 electoral votes. he's still down eight percentage points, and what we've seen across these polls is that obama is increasingly competitive with romney on who would do best to handle the economy. but the fact that we've got a

little bit of movement nationally and movement in florida and virginia tells me that there's still some play in this electorate, in this contest, and that's the hope for romney going into this debate tonight. >> what do you think happened in florida versus in ohio? because for a while, they were both tracking. i mean, florida by the gallup poll, he was down by nine points, romney was. what happened in florida? >> there was a poll last week that showed florida down nine for romney. i think that's too high. the campaign has begun advertising -- the romney campaign, that is, advertising more heavily in florida than they had been previousism we see in our poll that romney's favorables are up, so i think some of that sort of negative thing that attached to him from 47% has worn off a little bit and he's getting in a more competitive position. what we see in presidential race after presidential race is whenever anybody in a structurally close race, whenever anybody gets a lead

that looks to be pushing the boundary, and obama's lead, when you start getting to four, five, six-point lead in some of these national polls, that's just too high given the divisions in the country, so that's coming down a little bit, and it sets the table again for romney to try to reset impressions of him tonight, really make a strong case on the economy and deal with that 47% video. >> why do you think the situation has not changed in ohio? what's the different metric there? is it because they have people that are more closely related to the car industry and that argument that the obama campaign is at play there? >> the auto industry makes a difference. remember that florida is also an older electorate than ohio. >> but people thought that would slow people that the choice of ryan would scare people. >> he's up in all the polls with people over 65, though. >> right. but senior citizens are the strongest element of romney's coalition. doing very well with them right now. >> john, i know that every day as we get closer to the

election, we need things to talk about, and the polls are all we have. how many people was this, 849 or something? what's the number? >> you talking about the national poll? >> yeah, either one. >> in the swing state polls, we do 1,300 registered voters. >> doesn't matter what the actual numbers are. i remember taking statistics, so i understand standard -- i understand how they try to make it scientific. but you know what i'm saying. you take any 900 people at any given tile and you think about 200 million people, whatever it is, but then we microanalyze the moist minute details because that's what we do as journalists. i can give you polls -- i saw a poll last week that had -- it was plus-four for the president, and then another one was down six. it was an individual state. and then you got the deviations

between rasmussen consistently and some of the other, whether it's quinnipiac or the other ones. that's all we got, though. and we have to talk about them, i guess. i take all of them with such a huge grain of salt. >> well, and joe, there's reason for all of us to take them with a bigger grain of salt than we used to in the past for this reason. it's becoming harder and harder to poll because response rates are down. >> recording. i hang up immediately. they're trying to give me a cruise. do you ever pick up the phone and it's -- and i go no, captain. i don't want to go. >> there are two different questions on the table, joe. one is the accuracy of telephone polling. it's getting harder and harder to do. most pollsters think we're going to move to online.

but the second is the exit polls. >> i remember how downtrodden bush was in the afternoon. john kerry -- they were toasting mr. president in boston. >> this is where some of the participation rate questions also come into play. these are in person interviews. people with different views, if they perceive the interviewer is coming from a different place, they might choose not to participate. so yes, we've all got to watch with a grain of salt. all i know is, joe, the campaigns themselves are making their decisions based on the same polls that we're looking at. >> i know. a different one every day. we needed the music with this one. >> i'm losing on that one. everybody disagrees. >> joe, how was ian poulter yesterday? >> oh, my god. it was awesome. you know what we're going to do now? we're going to elevate him to the unofficial squawk golf

analyst. all he's got to do -- whenever anything is going on -- i mean, he's very frank and sort of has an edge to him. what's wrong? >> nothing. >> you wanted to ask a question now that we're talking about ian poulter? >> i'll just tell you that we're doing a sports thing out here, too. my coffee came from elway's restaurant. john elway's got a very nice restaurant. >> we heard from peyton over the weekend, i would say, right? >> yeah. in a big way. >> this is probably really necessary. go ahead. what do you need? >> i wanted to know if -- >> you know, forget about it. we've got to go to break. it's okay. >> john, we will ask the question -- andrew will have a question for you when you come back in the 7:00 hour. >> i'll be ready. >> programming note for you. cnbc's coverage of the first presidential debate begins tonight at 7:00 eastern time. coming up, your morning dose of sports and weather. the yankees one game away from

clinching the a.l. east. plus, we're going to hop behind the wheel with the ceo of the nation's largest auto dealer. mike jackson, call it the car indicator, a snapshot of consumer confidence and much more. that's coming up next. plus, social media note. the cnbc twicker will be available. use #cnbc2012 for a chance to see your tweet. mike rowe here at a ford dealer with a little q&a for fiona. tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer.

welcome back. it's time for your daily sports report. the yankees beating the red sox 4-3 in 12 innings last night. we do have music for this, though. new york remains a game up on baltimore in the a.l. east with one game to go. if the teams end even after today's games, they'll play a tiebreaker tomorrow in baltimore with the winner named a.l. east champion. and the loser goes as the wild card. in the west, the oakland a's beat texas 3-1 last night and will play the rangers today at home for the a.l. west title. today's winner is division champ, the loser goes in as a wild card. the race for the best record in the national league is going to come down to the last day of the season also. both the cincinnati reds and washington nationals have 97 victories. the nationals own the head-to-head tiebreaker. and in hockey news, the nhl labor talks broke off yesterday,

no progress reported. the league says that the nhl teams have lost nearly $100 million in revenue as a result of the cancelled preseason. next week's scheduled start of the regular season likely will be the next casualty. >> checking the schedules for this weekend. cincinnati probably is going to play san francisco is what i saw. there's a wild card game on friday. i'm going to get on a plane, just making plans for the weekend. and then you got notre dame game. that's on nbc. >> we love notre dame, always. >> great to watch. >> now to today's forecast. national forecast. alex wallace joins us from the weather channel. mr. wallace. >> good morning to you. as we head on through this hump day of the week, we've got some dry weather across a good portion of the south. florida, though, still unsettled with showers and storms. we're headed to the northeast. it's going to be one of those gray sort of days.

cloudy skies, off and on showers with temperatures in the 60s in boston. 80s as you head to theed ed m mid-atlantic d.c. a nice day in minneapolis with your sunshine. then we head towards the western half of the nation. dry conditions from san francisco to las vegas. what we have across the northern rockies, a little wintery weather. that's right, some snow to contend with here. moisture plus cold air will equal snow across parts of montana, and tomorrow that will traverse its way across sections of the northern plains and the midwest. some snow, fargo up towards international falls will be possible there. how much? a couple of inches. we're not talking huge amounts in montana, but tonight and into tomorrow, we could be talking higher amounts. this area that's in that pinkish purple. we could be looking at six or more inches of snow. could be doing some shoveling here. it's all thanks to some cold air

that's driving southward. we're seeing temperatures that will be 10, 15, 20 degrees below average. numbers feeling more like november. that's what we'll find heading into thursday. kansas city, 63 for your day, ten degrees below average, and that cool air continues to work south and east. chicago, you're not even getting out of the 50s. 53 around st. louis. that's nearly 23 degrees below our average. >> thank you very much. when we come back, we have mike jackson, he says he has good news on the state of the u.s. economy. but first as we head to a break, take a look at yesterday's winners and losers. ♪ tomorrow on "squawk box," we're counting down the

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[ male announcer ] the exceedingly nimble, ridiculously agile, tight turning, fun to drive 2013 smart. ♪ good morning, and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. our top story, the first presidential debate is tonight. this half-hour, we're going to

have our own version of a debate. strategists from both sides of the aisle. those two gentlemen that you've seen on our show many times before. democrat jimmy williams is sitting right next to me, and republican joe watkins -- >> he's missing in action. >> you know what, he heard it was jimmy, he said i can't debate that guy. i can't. i'm going to fold like -- he's afraid. that happens. >> he shouldn't be. >> oh, here he comes! >> he's running. >> it's bad to run. >> you're out of breath. >> then you would have a chance. >> not if you run a lot. >> but then you would have a chance. sales at auto nation sailing 23%. mike jackson is the ceo. how you doing? >> joe, good morning, how are you? good to see you. >> i'm great. the first thing i read, it wasn't specific to you, but wow, u.s. auto sales hit a four and a

half-year high. i was thinking that auto bailout was great. and then i read, though, led by toyota and honda. that's when i get the conflicting ideas about whether that -- i don't know. they're not necessarily gm. was your business led by the japanese auto makers too? >> yes, joe, absolutely. we were up 60% almost with honda, 40% with toyota. you've got to remember last year after the earthquake, their production was basically shut down to the disruption. joe, don't forget, it's americans by and large that are putting together and producing those hondas and toyotas. those are factories here in the united states with great american jobs. so let's not forget that. and yeah, the auto industry is absolutely a bright spot in the u.s. economy. a selling rate of almost 15 million units on an annualized basis for the month of september. which puts us in good shape for

our forecast, the full year of around mid '14, with the only wild card with the fourth quarter, what's going to happen with the election and the fiscal cliff. i would also point out in addition to the japanese, we see recovery in our housing states led by california up around 44%, and of course, the great state of texas is just continuing to be very strong, up 25%. >> i guess we're going to keep it somewhat short. we have a debate coming up here about the debate tonight. i am told -- were you in the audience? were you one of the 53 percenters feeling good about yourself when the 47% was brought snup we brought up? were you there for that? >> live. you were there live? >> absolutely. i was there live in person. i have to say, romney was answering a question in the

context of -- >> don't give me any -- i don't want any details. he doesn't care about those people. he doesn't care about them, i know that. he's so rich. go ahead, give me the details. >> he was talking about how his campaign is going to focus on the 6% independents, undecided votes, and of course, then he talked about the 47%. as one sitting there, and i have a pretty good political antenna, within the context of his answers in the total evening, it didn't stand out. now, certainly as a sound byte, it's not very good. and i think tonight when he is in the debate, i think it's a very -- still a very winnable campaign for romney and i think it's a very winnable debate for him tonight. the mainstream media has painted him as inept and gaffe-prone, and that is simply not the case. i think the expectations are so

low for romney tonight that when he can't be edited or taken out of context, i think it's a very winnable debate. >> if you go back in every election, the republicans are always painted -- but by definition, they are kind of stupid and gaffe-prone. they're republicans. why can't you figure that out? look at the views according to mainstream media. look at the views that they hold. by definition, they are stupid. >> i think if romney -- >> we painted john kerry as stupid. we painted al gore as goofy. >> al gore was honing his skills at harvard. george bush was cheerleading at yale and he had a higher gpa. barack obama just admitted, i was a crappy student. but we'll never know. by definition. and look at you. look how smart you are compared to me.

"new york times," too big to fail, all that stuff. anyway, mike -- >> what i think romney needs to do -- >> we've got to go. >> good seeing you guys this morning. >> good seeing you this morning. thanks for playing along. we wanted to gear up for this next debate. the smart one, the democrat, and the stupid one, the republican. try not to trip all over yourself. but do know that your views are so antiquated -- >> absolutely. >> the first presidential debate will be held tonight in the battleground state of colorado. joining us now for a debate before the debate, democratic strategist jimmy williams, and darrell watkins, he made it to the table. >> somebody get behind you to talk about that? >> yes. >> joe, i'm going to go to you first. my question is romney has historically not been an aggressor in these debates.

at least in the primaries. >> in the primaries, yeah, he couldn't be. >> how does he approach it this time? >> i think tonight he has to pay attention to style. remember, debates -- >> what do you mean? >> debates are not always won by substance. remember, walter mondale was creaming ronald reagan in that 1984 debate they had and reagan turned it around. and the only line you remember from the night was something to the effect of "i'm not going to make age an issue in this campaign, i will not use my opponent's youth and inexperience as a political issue." and everybody laughed, including mondale, and it won reagan the debate. or in the 1980 debate where ronald reagan kept saying to jimmy carter "there you go again." a great line. well said. >> jimmy says obama wants to have a substantive debate. is there a worry that he could get too deep into the issues? >> no, because of the timeframe. they're 15-minute segments. they'll go back and forth.

it's not set up. they won't have the chance to go way into it deep. >> that's my worry, that you come out of this with no substance. i want substance. >> if i'm a candidate running for the presidency of the united states, what i really care about are the undecides, the people who have not yet made up their mind. those are the folks that are going to swing this election. so you've got to speak to those folks. for them, it's not just a matter of the substance. substance is very, very important. but it's also a matter of your style. how do you react under pressure? do you have a sense of humor? are you quick on your feet? >> so here's a substantive question. it goes to specifics. we always talk about are we going to hear about specifics during this debate. apparently yesterday, romney came out and floated this idea of itemized deductions, a cap on itemized deduction of $17,000. do you think we're going to hear anything about that in the debates? >> this is the first i'm hearing about it, but i think it's a good thing. i think it's good for mitt

romney to talk in substance. whether he gets to talk in that kind of substance tonight is anybody's guess. if i'm a candidate, if i'm mitt romney, i'm going to be nimble. i'm going to be prepared to turn on a dime. it's not so much the point you get at. it's also the ability to attack. remember, lloyd benson in 1988 against dan quayle said that one line to dan quayle, i knew jack kennedy. jack kennedy was a friend of mine. >> if you're obama, do you attack romney or do you advertise whatever you think your own virtue is? >> every poll that came up this morning, romney sup side down in favorables and that's a bad thing. you don't need to attack hilm. you attack congress for not passing the 28% corporate, and blah, blah, blah. you don't have to now. if romney goes after him, then you rebut that. but if i'm obama, i do not attack him. you're the president of the

united states. you're cool, calm, and collected. >> when andrew asked that question -- i also saw it in "the new york times." the debate handler supposedly had to tell the president, please don't be too smart. you're a professor. don't just blow them away with your details, which you could. give me the substancetive argument for president obama on what he's rung on. all i know is he wants to raise taxes on rich people. other than that, what is his substance? >> are you better off than you were four years ago. >> but that's not -- >> isn't that the question? is that the question reagan asked? >> that's the question romney asked more recently. >> what is substantive -- >> what do we know? we haven't had a budget in three years. >> i would love to see these two

men get up and give three specific points they would do if they became president in the next four years. >> and on that point then, three specific points that you think obama's going to give. >> lower the corporate rate, do tax reform and rebuild every school that's over over 50 years. >> how's that any different than what romney would tell you? >> it's not. >> is it shocking to you? >> in four years, he's had one of the -- he's had the senate on his side. and what can he say he's done? if you want to ask the question that ronald reagan asked in 1980 is are you better off today than you were four years ago. is there less unemployment than there was four years ago? the answer for at least 23 million americans is no. >> ask the 800,000 people a month that are losing their jobs, the answer is yes.

>> that they're better off now than they were four years ago? >> the unemployment rate is above where it was. ronald reagan's highest unemployment was 10.1%. when he ran for re-election was 7.1%. >> what was it when he started? >> what? >> what was the unemployment rate when obama started? 7.9. it's at 8.1. >> we call that the bush unemployment number. >> i know you do. i don't think americans have a short-term memory lapse. that's the problem with romney. not to mention romney is the gift that keeps on going. he keeps saying stupid things like 47%. if romney doesn't do himself any damage, he wins the debate. >> does he have to give specifics though? he's now been painted as this person who is going to be taxing the middle class to pay for wealthy people's tax cuts. does he have to get specific? >> i think lara will ask that. >> he's got to do well. he's got to show well in this. i don't think ratcheting up

expectation is good. i think what you want to do if you're getting ready for the debate is ratchet down expectation. i think he'll do fine. he needs to have a knockout. it doesn't need to be a decision. it needs to be a ko. >> how much of this debate is going to be about the economy and jobs and taxes tonight as opposed to education, health care, social issues, what have you? >> well, all those things matter, certainly when it comes to education, that's the future. i mean, the future generations will be -- will fail, rise, or fall based on education, so that's a very important building block for the country going forward. >> is that a building block for romney's campaign? >> it is. it's something he's talked about. he has an idea for americans and education that's very different from what president obama has been able to do. president obama would like also to do a lot of the school choice things that romney is talking about, but has been hampered from doing any of it. >> tonight, they will not go into the foreign policy stuff.

the one part where obama is weak is this flip-flopping, if you will, on the libya stuff. that's the weakness, the nugget, if you will, the window opening. they won't go into that tonight, or they shouldn't go into it. >> thank you, guys, for the pregame. appreciate it. quick programming note. cnbc's coverage of the first presidential debate begins tonight at 7:00 p.m. eastern time. >> if you've got your reaction shots ready? we have a different director today. >> yeah. >> god forbid -- let me just try. surprised. >> just be ready. because it's coming. >> i need to know. it's a long morning. >> he's thrown in with us trying to follow our conversation around the table. but be careful. >> almost got me.

i was doing that. >> oh, you were? >> yeah. >> i'm listening to you intently. >> thank you. i appreciate it. >> don't take me when i'm listening to andrew seriously. anyway. did you get that? i figure when i do the great things -- >> this is a youtube moment. it will go viral. >> you've got to watch every second because you never know what we're going to show you that we don't mean to show you. guys, thank you very much for coming in. we appreciate it. when we come back, a mixed start to the final quarter of year for stocks. we'll be asking how investors can win right after. this

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welcome back, everybody. ira harris joins us from the cme. we have a big jobs report coming up on friday. we haven't talked about it as much as we might have because of all the other things that are happening with europe and with these presidential debates that are happening tonight, but how important is this number for the markets? >> important. that's just because of the election. they're just taking on added importance, although the fed has promised us that they're going to be in this ultra ease mode, and that unemployment is just part of the measure. unless you listen to that charles evans, who would like to have a 7% unemployment target and/or 3% inflation, and then we've heard it ratcheted down to 5%. this will give us a good look at

whether or not we're getting any type of traction, even though the headwinds from the west of the world are pretty strong. >> today we get adp and granted, adp has not always been the best indicator of what we'll get out of jobs, but we're looking for 155,000 private sector jobs that are created. how tight is the spread, if it's anywhere from 100 to 200, is it kind of a wash? >> yeah, becky. what the adp numbers turned into is the greatest volume machine ever that we could imagine. it's like last time. they had a number -- you get the market moving one way, it's a terrible miss, and the market moves back the other way. yes, i know they'll argue, adp will probably argue well, you smoothed out the jobs that we saw from the last quarter for the year. the adp numbers looked good over a 12-month moving average. but the markets are trading in realtime and not over a 12-month period. >> but it is something that moves the markets, right?

people are trading on those numbers? >> no question. you can't help it. a lot of these are set up to headlines, and they're to headline and they're going to move the markets. and if the number is way off the charts, you're going to get a dynamic. it seems the market has settled in now, and i'm not talking about the adp number, the unemployment number, the last consensus number looks about 145. and of course, that'll be important whether how many of those are manufacturing? do we gain or lose in manufacturing? you know, with the robustness in the home builders, we should start to see strong construction numbers. those are important indicators going forward. >> thank you very much for your time. >> my pleasure. okay. still to come on "squawk" this morning, lowe's boss james tisch, his opinion on the market. october 3rd, 2008, the emergency economic stabilization act became law.

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i don't know. >> oh. okay. hi.

stocktober. not too early to talk about halloween. do you remember when it was? 2009. 2009. 2009. going up 1 billion this year. to what? $8 billion. >> what does the average family spend? >> i think on trick-or-treat, i think like $80. >> i read somewhere -- >> you throw in the costume, the house, the pumpkins. >> guess how much? my daughter did this in a blog. guess how much on pet costumes? the reason i brought this up was because our german shepherd had a big bird hat on and looks ridiculous. but $370 million on pet costumes. >> wow. that's crazy. >> you want to talk about how much are spent on toupees per year? >> not too much because bald is powerful. bald is powerful. this is the story from the "wall street journal" we've been arguing about this morning. saying if you're up for a promotion, you might want to

consider shaving your head. because guys who are bald have an edge and potentially better leadership skills. than those who have long locks. and guys, i'm sorry, you're left out on this one. you think of people like steve balmer, jim cramer. >> but there is science behind this. >> more testosterone. >> it's the testosterone that kills the hair. you're more aggressive. you're an aggressor. >> how do you keep your hair? >> if zucker was still -- i would be nicer, he has a full head of hair so i'm not afraid right now. if some guy who is unfortunately is bald happens to end up in a powerful position, it's not because of being bald, it's in spite of being bald. toupees look like crap. you can't buy a decent toupee. >> rarely bald anymore. maybe works in business, not in politics, i don't know. kong.

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counting down to the mile-high showdown. team coverage on tonight's high-stakes debate and what it means for your money. a discussion from both sides of the aisle, edward connor, former dnc chair howard dean. keeping tabs on jobs in network, today's guest host james tisch has one of the most diversified companies in the country. the prospects for america's employment picture. the second hour of "squawk box" begins right now. good morning, everybody.

welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernan and andrew ross-sorkin. in ten minutes, we'll be introducing our guest host, james tisch will be joining us. also at 8:00 a.m. eastern, irene rosenfeld, she's the ceo of the company formally known as kraft foods. she'll give an outlook for her business. a report on private sector job growth ahead of friday's government jobs number. and jim grant the founder and editor of grant's interest rate observer on investment ideas and the fed's qe strategy, a big wednesday morning for you. before we get to any of that, though, andrew has this morning's business headlines. thanks, becky. we've got green arrows across the board. only marginally. dow looks like it would open 5 1/2 points higher, and the s&p 500 open higher, as well.

let's get you through the morning headlines. american airlines saying improperly installed clamps are to blame for seats coming loose in two jets over the past week. found four other boeing 757s with the same issue, now in the process of fixing those clamps. that couldn't come at a worse time for american with both bankruptcy and some even saying sort of work slowdowns going on. >> although, bad things can happen on jets, and it would be bad if your seat came up. >> but not -- >> but you'd still be in a plane. you'd still be in a plane flying, compared to like breaches -- you heard about when the wings -- >> yeah. this is not that. >> fix that. fix this too, but fix the wing. >> here's another situation that does seem to be getting fixed. chicago teachers have voted on the tentative contract agreement that ended the seven-day strike last month. >> clear sailing in chicago now. >> clear sailing. the union says the ballots will be counted today and the results should be known by tonight.

and at least four private equity firms are examining the retailers books. that could be the first step to an $11 billion buyout, among the firm said to be involved, apollo and tpg. >> we're all waiting for that adp number, that is going to set the stage for what we expect on friday from the government jobs report. adp hasn't always been the best indicator, but there are traders waiting for this, the volume is there, that's what ira harris was telling us. you're on a wait and see moment, barely budging for any of these futures indicators. if you looked overnight at what happened in asia, we did see some movement. a lot of markets are still closed. but the china non-manufacturing purchasing managers index was in expansion to territories still at 53.7%, down from august, 66.3, again, building that case that things are starting to slow down in china. you can see that the nikkei

closed down by close to 40 points. in europe right now, the ftse, the dax, the cac, barely budged, as well. everyone waiting for this economic indicator. >> the adp report, remind me, last month -- >> it was way up. >> it was really good two months in a row. it was really good two months ago. >> last time -- >> last one had a big number, supposed to be huge and we got a horrible jobs report, i think. >> was it bad? >> and we went to 8.1, but we had under 100,000, i think, but it didn't do anything to the polls even though it was 90,000 and went to 8.1% because more people left the workforce. >> i don't remember the adp for the last -- >> the adp was calling for much higher, so it was off. >> and it came with nothing. >> the previous times. it goes back and forth between being really close to being correct, but then for a whole year it's pretty close, but when

you average out. what is the average that we're supposed to do? >> 155. >> 155 private sector. >> i think it's 145 is what you look at for private -- >> yeah, 155 private, minus ten, government, it's 145 is where -- >> people are going to be a little -- >> well, yeah. all right, the latest "wall street journal" -- you have your questions ready for harwood? he's coming back now. >> i used it on these guys. i was going the whole 17% tax thing. >> you're so happy to get a detail. >> i thought it was an interesting detail. >> he said there's no way i would lose the progressive nature of the tax -- i would make sure rich people wouldn't pay any less. >> right. right. the latest "wall street journal" nbc news poll showing president obama's lead has narrowed heading into tonight's debate. chief washington correspondent john harwood. i almost said john denver

because it's right above it. john denver is in harwood tonight getting ready for -- no, john is in denver. >> rest in peace, john denver. >> great john, rocky mountain high. an adventurer flying around in one of those planes. >> 201,000 was the last -- >> adp was 201 and we got 90. >> we got adp on top of everything else, john. we had a horrible number last time. i don't really know, it really is different this time if you're able to tie the continuing bad jobs number to the prior president, then it really doesn't matter. it's like all bets are off compared to all those metrics we used to use where if it's above 7% or 8%, the incumbent has a problem. not if people believe it wasn't his fault. i'm not sure any of this really matters that much. >> well, but remember a couple things about that, joe. first of all, the unemployment rate's only one indicator, there are a lot of other things, the market, household -- mark zandy

talks about households being in a lot better shape. that's one. the second is what we've seen in our polling is that people who are inclined to vote for obama are kind of reconciling their views about the economy with that vote. that's one of the reasons why we're seeing this rising optimism on the economy. it's pretty sharply concentrated among democrats and independents that are leaning obama's way. and that it's sort of like as our pollster has said, they're getting comfortable with the idea of a second term for obama. >> right. >> yeah. right track goes from 28 to 38, 38 is -- >> it's now 40. it's now 40. >> in this poll. >> reporter: it's under water 13 points, which is not good, but it was under water 30 points. >> 30. >> second thing ipt to say, yes, to hop on andrew's point. i think the 17% or 17,000 cap on

deduction that romney alluded to in the interview yesterday was a step forward. a tangible step forward to describing what he's going to do. >> sort of describing it. >> reporter: yes. and doesn't resolve the question about how do you keep the code without increasing the deficit. but it's a promising proposal that tax policy exports like because it is achievable. now, if you lump the deductions together and don't fight them one by one and have a cap, that is easier to get done. >> on that 17,000, a, do you think we're going to hear about it tonight? does that include things like charitable deductions, mortgage deductions? how far do you think that goes? >> reporter: yes, it does. >> 17,000 cap across the board. that is meaningful. that would have a huge impact on the real estate market, it would have a huge impact broadly.

>> reporter: yes, i believe from what i was reading yesterday, and i haven't gotten a chance to delve into it that $17,000 level was set purposefully because people in the under $200,000 income category generally speaking don't have more than that, right? but it makes it easier to begin taking on deductions as you move up the scale. so i do think it's positive. i would expect him to get asked about it and, you know, if he starts sketching out a little bit how he would reform the tax code, that increases pressure on the president who has also indicated he likes conceptionally both for the corporate tax code and the individual tax code to put some pressure on him to stretch out where he might do something the same. >> john, is it better for romney to -- i don't want to say move to the middle on this issue, but to talk more and more about some of these progressives approaches on the tax policy? or is it better in terms of getting the base to turn out to

talk about lower taxes broadly? >> reporter: i think that it's clear that romney wants to go toward the middle and try to appeal to swing voters. he has to do that. he's past the point where he can focus on ginning up his base. and even at the convention speech. remember, this is a republican candidate who is proposing a 20% across the board rates. he did not mention that cut in his acceptance speech. that tells you that they know, a, it is not -- that many voters see it as not realistic that you can achieve that. and secondly, that when many swing voters hear the president say i'm cutting everybody's taxes across the board including yours, many swing voters hear he's cutting taxes for the rich. >> is that the same situation for the president? is he more interested about getting his base out and making sure they show up to vote? >> reporter: both of them have to get their bases ginned up,

but that work is largely done. i think the president is going to be talking to voters in the middle during this debate. this is the biggest audience they get to talk to the american people side by side to their opponent to the extent the swing voters are out there and there aren't many, it's somewhere below 10%. they're both going to be focused on those people. and the key target to think about, becky, is people like you, college-educated white women. that is where mitt romney needs to get his numbers up. he is doing very well among white voters generally speaking, very well among white men, but he needs to do better among white women, especially those with college degrees. that's where the social issues have been pressed effectively by the president and some of the views of the role of government that obama has expressed resinate more and i would expect to hear mitt romney talk to that. >> good. my vote matters this time. >> reporter: you matter. you are more in play in this

election than joe is. let's put it that way. >> your husband cancels your vote every time. it doesn't matter. still doesn't matter. >> we'll see. maybe some day we'll be on the same side of the table. >> thanks, john. cnbc's coverage -- >> or maybe i'll just send him on a lot of errands. >> my wife -- we're a formidable we double most -- anyway, the first presidential debate begins tonight at 7:00 p.m. eastern. i was just -- we've got to go? i was just looking at -- do you see who won the premiere week? >> no. >> for networks? >> nbc? >> hell yes. hell, yes. and, in fact, "revolution" is happening. "revolution" is some happening series. i haven't seen it yet, we watch

"homeland," "board walk empire," but, yeah, number one for the first time since 2003. >> we're going to talk about this in a minute. when we come back, from china to the fiscal cliff. loews ceo james tisch. >> the battle over which direction to take the nation. "squawk" will be right back. one is for a clean, wedomestic energy future

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welcome back, everybody. the economy obviously front and center this week with the jobs report coming out on friday. our guest host this morning runs a company that has several economic indicators all rolled into one. joining us for the remainder of the show with his take on the markets and what's happening in corporate america is jim tisch, and jim, it's great to have you here onset. we were just talking about how you have a lot of different

things that really give you a good idea of what's happening in the economy. diamond offshore, what's happening from an energy perspective, you have the luxury hotels there, the insurance line of business, you've got a real good idea of what's happening. why don't you lay out what you're seeing right now? >> so, first of all, the only business that really is reflective of the economy is our hotel business. it's our smallest business. and there we're bumping along. things over the summer were so-so, not great, not terrible. our other businesses are in cycles all their own. the insurance industry, commercial property casualty insurance is driven by what's going on within the industry itself and the amount of capital in the industry. and right now, there's an inflation story to be told because the industry's getting price increases of 5% to 8%. in our other three businesses are in oil and gas. offshore drilling is very, very strong, day rates are up on six

generation rigs, the $550,000 to $600,000 a day, that's up from $400,000 a day two or three years ago. demand, demand for offshore drilling. we are in the oil and gas exploration and production business. and natural gas prices are close -- the spot price is about $3.30, the 12-month strip is at $4, close to $4, which is way up from where it's been. i don't think it's got a lot of room to go beyond there because we can produce virtually an unlimited amount of natural gas between $4 and $4.50, mcf, which is the -- >> makes you wonder why we're not doing more.

>> it's going to be transformative for our economy. absolutely. >> it'll be great for renewable stuff, but it's transformative for our economy. >> that's right. >> put a big bet on the other stuff. but nobody knew fracking was going to be so great. which is why you better let things settle out. smart people to figure it out, you never get it right. >> the other thing that's happened as a result of fracking is our domestic oil production is up dramatically. it's up like 1 1/2 million barrels over the past two years. >> just from the fracking, the technology being used on the oil? >> yes. go to the bakken shale in the dakotas, and bingo. >> for a while, half the wells were only half gone but we kohn get anymore, and now we're going to get the last drop out of a lot of them. same with saudi arabia. it looked like it was empty, but half was left, but now there are ways to getting it. >> these are shale wells, new

shale wells that are being drilled that are very productive. we're drilling a whole bunch of them in oklahoma. and we're also drilling them in texas. and, you know, with $90 to $95 oil -- >> what was the third thing? >> third thing, we have a natural gas pipeline. >> a pipeline. >> a pipeline system. >> that keeps it in the country. don't get her started. >> and i know you're in favor of exporting it. and i was kind of thinking about this last night, trying to get my head around it. >> it's about jobs. it's all about jobs. >> oh, boy. >> my calculation -- >> go for it. >> my calculations, for every -- >> everybody stand back. >> no, i'm trying to get my head around this. >> so we produce 65 billion cubic feet of natural gas a day. can. >> yes. >> at the same price, we could produce 85 billion cubic feet of natural gas per day. for every additional billion

cubic feet we produce, my calculation is that creates an additional 7,000 to 10,000 permanent jobs in the economy. >> good jobs. >> there's only one approval that's been given to export -- >> this year. >> right. and diamond oil has one? >> no, no, no -- >> there's five others, i think, that are waiting. five other approvals waiting for this. i go back and forth because when you think about trying to find an energy policy for this country that would make us less reliant on saudi arabia and other places. >> natural gas is no longer a scarce resource, number one. number two, let me ask you this, this is from the what's good for the goose, is good for the gander department. >> i know, i believe in free trade. >> were you upset with the chinese when they weren't exporting their rare earth? and if they're not exporting their rare earth because they think it's a scarce resource for them. >> but i was upset with the chinese for trying to buy all the oil and gas resources they

could get their hands on and hoarding it all and bringing it back in. and it's hard when you're competing against countries and huge resource hogs that are run by a centralized planning agency when we don't have an energy policy here ourselves. i think that sets up for a real big problem. >> i think we should let the chinese buy. they're going to buy it, they'll buy it wherever it is, right? >> we are not doing more to build more of an infrastructure to use the natural gas here in the united states. >> oh, oh -- >> it's coming. it's happening. >> it's happening. and you know what? we don't need the government to do anything. >> right. >> we just need the government to make sure that there are no bad players. >> but, jim, for a while, we weren't -- there was a stated intention to not add to infrastructure for hydrocarbon based energy. that's where we were four years ago. we had to get completely reject that notion. do it now.

>> with respect to natural gas, it's all privately funded. it's not government funded. >> right. okay. we've got to run. we're going to come back shortly. when we come back, we're going to talk baseball and politics after the break. and every day since, we've worked hard to keep it. bp has paid over twenty-three billion dollars to help people and businesses who were affected, and to cover cleanup costs. today, the beaches and gulf are open for everyone to enjoy -- and many areas are reporting their best tourism seasons in years. we've shared what we've learned with governments and across the industry so we can all produce energy more safely. i want you to know, there's another commitment bp takes just as seriously: our commitment to america. bp supports nearly two-hundred-fifty thousand jobs in communities across the country. we hired three thousand people just last year. bp invests more in america than in any other country. in fact, over the last five years, no other energy company has invested more in the us than bp.

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it has come down to this for the oakland athletics. one game against the texas rangers for the american league west title. travis blackly allowed one run over six innings. moving the a's into a first-place tie with texas. the team will be facing off in the final game of the regular season to decide who will take the west. only four teams have won a division for pennant by at least 13 games. and a soggy game in new york. the yankees regaining their one-game lead. he had a two-run homer in the ninth to tie the game. everyone's laughing. >> they know who you're talking about. >> winning the single, 4-3 over the red sox. the tie-breaker for tomorrow's the a.l. east title.

>> you made it in finance. >> you got a career. >> thank you for that. >> what a job. >> one of our anchors, one of the ladies years ago they had to do hakeem -- i mean, it was so messed up. i didn't even know who and then -- anyway. the people know who. i was watching a little of that game. >> yeah? >> if you have any comments or questions anything you see here on "squawk" e-mail us at squawk@cnbc.com. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan. tdd#: 1-800-345-2550 with the new global account from schwab, tdd#: 1-800-345-2550 i hunt down opportunities around the world tdd#: 1-800-345-2550 as if i'm right there. tdd#: 1-800-345-2550 and i'm in total control because i can trade tdd#: 1-800-345-2550 directly online in 12 markets in their local currencies. tdd#: 1-800-345-2550 i use their global research to get an edge. tdd#: 1-800-345-2550 their equity ratings show me how schwab

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welcome back to "squawk" on this wednesday morning. in the headlines, mortgage applications jumping 17% last week. that was driven largely by a surge in refinancing activity as mortgage rates drop to a record low. investors are looking ahead to the september adp report due out

at 8:15 eastern time. economists anticipating an addition of 155,000 new private sector jobs. it might go down to about 145,000. the latest member of the u.s. service sector is also out this morning. the substitute for supply management nonmanufacturing index expected to come in at 53.3 for september, down slightly from august levels. and this just in, a german newspaper saying the board of metro pcs has approved a deal to move the mobile unit. they hold 74% of the new entity. said yesterday that it was in talks about such a deal. and that will give t-mobile a little bit of breathing room to figure out what to do. to try to keep them viable so we don't have a duopoly between verizon and at&t. >> is it still possible? >> you were against, you thought that was too much clout for at&t. >> i thought it was a little too much.

>> but if they end up going by the wayside, it would be nice if at&t had that. >> t-mobile has probably two or three more deals to do. >> before they're really players. >> what happens if they go by the wayside? >> by 2016 we're building it, at&t could have 98%, 99% coverage right away. >> they're stuck with this asset they don't really want and trying to invest and figure out what to do with it. moving on. in less than 12 hours, president obama and mitt romney will go toe-to-toe in their first presidential debate in the battleground state of colorado. joining us now, ed connor, a former partner at bain capital and author of "unintended consequences," and howard dean, cnbc contributor. >> jay-z. >> now, i was wondering whether this was a fair fight. i was thinking you're a poor businessman, this guy was head of the dnc, he's a governor, a

professional arguer. i know this for a fact. let's get started. >> you're terrible. >> i heard that. >> we're going to get in an argument over which one of our guys is the worst debater ever. >> i love what we're seeing. >> yeah, i think you're right. i'll start with you, governor, what do you expect for tonight? >> i think this is an opportunity, always an opportunity for the challenger because he gets to stand on the stage with the president of the united states and look presidential. he's got a little bit of a tough road because he's got to push the president without looking like he's being unfairly aggressive, you know, as the al gore, you were making fun of. you have to be careful about that. and the president has to look presidential. he can't let governor romney get under his skin. he can't appear irritable. he certainly can't talk down to him. >> yeah. >> if governor romney given bill

clinton's speech and given the bump in the polls and the right track/wrong track stuff has improved. people have sort of come around to thinking that maybe it was a tough four years for anyone. can romney ever make the case that it is still a really bad economy that we're under? this is the worst recession. can he make it without looking nasty? >> i think he's got to make it. i think he's got to get people to look down the road and see the train wreck that's coming. >> not the one we've already had. >> 1.1 trillion in deficits racking up every year. we can run about 200 and keep the debt of gdp constant. which means we have a $900 billion tax increase coming. there's only about $1 trillion of income taxes. these are enormous tax increases that have to come. the president has fought every spending cut that's come along. he has a little bit, $50 billion from seniors and obama care to pay for some of obama care, but the rest of it will have to be covered by cost reduction, which he's fought every step of the

way for taxes. >> i wonder, howard, can you -- is it possible to win the argument where you say, all right, i'm rich, i got, you know, i've got an elevator for my cars. i know how to fix this and make it good for the middle class and look like -- maybe you're not as attached to the empathy, or is it better to be the president and say i really care, i just don't know how to do anything. >> neither one of them is good. look, the reason the numbers have gotten so much better for obama in terms of who is the best deal for the economy, whoever thought that would be even at this point. is simply because people think the president cares about them and they don't think that about mitt romney. >> incompetent doesn't help. >> we really have gained 4 million jobs, i grant you from the down -- >> no business experience in his administration, doesn't seem to be private-sector oriented, more interested in governments a

solution. >> the health care bill is -- i know the republicans call it a government takeover, it's nonsense. what happened in the health care bill is they cemented the future of health care inside the private sector. which is exactly what mitt romney did in massachusetts. >> baby steps. >> well, it is baby steps. i would agree baby steps. but to a single payer. >> when they say i'm out of here -- >> as a result of this bill, the private sector will have to figure out -- >> if you're going to argue with that, i'm not going to let you talk. say something to howard. bury howard. >> yes. yeah. >> you're such a good debater. >> -- a side show. >> that's true. >> we talked about taxes, but there's one of the ways to reduce the deficit. and that's through economic growth. so the thing, one of the things i would want to hear from both candidates tonight is how are they going to get the economy going? >> that's true. how are you going to get growth with $900 billion in taxes

hanging over the head of the economy. >> here's what i'm trying to understand. he's going to talk about lowering taxes, but yet -- >> no. lowering tax rates. >> lowering tax rates, but if ultimately what he's going to suggest on the flip side is, frankly, actually certain people's taxes are going to go up because he's moved to the middle on that issue, how do you square that circle as people would say? >> i think what he says is we're going to hold the total amount of taxes collected constant. we're going to lower the amount of deductions so that we can lower the marginal rate so there's more incentive to work. then you won't lower the marginal rate. what he holds is he holds the spending constant. constant, let the economy grow so he can bring the spending back to an historic 20% of gdp. >> but effectively, he's going to end up raising taxes on some people. >> howard recognizes what a train wreck it is that he's willing to go over the fiscal cliff rather than go down the

path. that's $500 billion of tax increases. >> and by the way -- >> i'm not saying we shouldn't have massive tax reform. i'm just saying we have to be truthful about it. >> it's not tax reform. it's tax increases. enormous tax increases to cover the spending. >> it is now morphed into neutral taxes. >> that's my point. >> tax reform. >> that was the democratic -- >> always said it would have the purpose of -- that left wing think tank with all the -- >> that is not. >> in the primaries, he was arguing he was going to give tax cuts for gazillionares. >> you get pushed a little in the primaries. >> i've never seen numbers like this. he is 50 points behind. >> that's right. it's very hard to be a president who is willing to give handouts in tough times. >> it's hard to be a president and say you don't like the latino population because you're not going to pass the dream act

which he's now agreed to pass as of yesterday. i couldn't believe it. >> going back to what i was saying before, what will the presiden annunciate tonight as his growth agenda? how will he get this economy going? and how will candidate romney do the same thing? what will they be saying to the american public? >> he's going to say i'll hold the spending until it gets to 20% of gdp. and that will avoid massive tax increases. and as long as those tax increases are hanging over the head of the economy, we are not going to get robust growth. we're kidding ourselves, it's been four years, we haven't gotten it. what howard wants to do is go off the cliff, get $500 billion of tax increases and $100 billion of spending cuts and you still got another $300 billion. >> that is not what the fiscal cliff does. restore the tax rates to bill clinton's tax rates. and we had a pretty good economy. >> that's $350 billion. >> we had a pretty darn good economy when we were playing

bill clinton's tax rates and then it cuts defenses we haven't done in 30 years and entitlement programs. >> there's a few on the left that admit that going back to the clinton tax rates is not just for people who are 250, it's for everyone. >> i agree with that. >> $200 billion in the middle class from the bush tax cuts and $100 billion from the payroll tax cut -- >> it would do a lot. >> we should take our medicine, we should do it. >> that's where i think you're right. we have to -- any politician who says democrat or republican, we're going to get out of this without suffering some pain -- >> that's what we're hearing from paul krugman who says any democrat that goes along with the simpson/bowles. >> only for one reason, you shouldn't raise the -- you shouldn't raise the eligibility for medicare to 67. that makes no sense at all. but otherwise -- >> why doesn't it? >> because medicare is the only universal health care plan that we have in this country. and to raise it at the time when people are retiring is insane.

and furthermore, the savings medicare not between 65 and 67, they're around 80. this is going to be no savings, you're going to replace it with some bureaucratic hodgepodge. >> that's the point, though. he's painting this as if any democrat who goes along with one of these sort of compromises that you get to down the road, that this is, basically -- >> i think paul krugman's great, but i disagree with him. we are going to have to cut spending and raise taxes, somebody will have to admit it. >> howard and haines, the economic argument on the 1990s. we commercialize the internet, about the equivalent of a telephone. the nasdaq went from 800 to 4,500, oil was at $18 a barrel, government spending was significantly lower because when clinton raised the taxes, we went to a surplus. so when you think that these tax increases aren't going to affect

the economy because they didn't affect it in the 1990s, you're hanging your hat on a ridiculous -- >> that's paying the price for getting out of this ridiculous deficit. >> the idea that once we implement the tax increases then it's only going to be two quarters -- >> i think people have to get used to the idea that they have something to contribute. people who make a lot of money don't get off scot-free. i think we're not going to raise taxes on anybody who makes a lot of money. everybody's going to have to put something in the pot and i'm tired of the republicans talking about reining in entitlements and cutting medicare when people who make $1 million a year don't put anything in the pot. >> everybody puts something in. >> everybody's going to have to put something in, includining middle class people. >> he's talking about huge tax increases. >> i'm talking about everybody doing their fair share -- >> i imagine you want a fair share. constantly around this table we have the argument that 50% of the public isn't paying federal income taxes.

which i've argued is an auspicious argument, but that's the argument the republicans often make. >> the problem is spending, we need to cut spending. >> the tax increases never paid for under the george bush -- >> going to slow our growth rate. and if fact we had tax increases in the 1990s when a unique set of circumstances worked in our favor, okay, we're kidding ourselves if we don't think the kind of tax increases that are required to cover this kind of spending increase -- >> growth would go a long way. >> four years -- >> howard, if we're at 25% spending as a percentage of gdp and 15% revenue and trying to get back to 18.20, growth would help us part of the way. but since both of them, both raising taxes and cutting spending are both negative for the economy, if you've got to do one or the other and you're worried about the economy's growth, you've got to start with the 25%. you've got to address the 25%. and then try to work on the other side when you see if you can get some growth.

>> joe, we're in a democracy. you can't simply have one sector pick up the tab for something that everybody did and that's what the republican plan is. >> but also what you're saying is not the same as what the president's saying -- >> i agree with that. i say we ought to go off thes fiscal cliff and everybody pick up the tax bill. and doing this with millionaires only is not going to -- >> nowhere. >> and i believe we have to cut spending. i absolutely believe. but i'm not willing to ask the people who need those spending programs to be the only people to make the sacrifice. and we need growth and that's the way to get out of this. we're not going to get out of growth at -- >> 4%. >> this is a much more rational debate than you're going to hear tonight, though. you're not going to hear people. >> i'm an optimist. i think we're going to hear both candidates very clearly define themselves rather than each candidate define the other person. >> let's hope for that. >> by the way, based on this conversation people are much closer than you think. >> it could be.

>> they have to start talking to each other, willing to work with each other, which we hope is going to happen after the election. >> that's the other thing i want to hear happen in the debate tonight. how each candidate is going to get a divided congress to go along with legislation. because up until now, americans are phenomenally frustrated with level of bipartisanship. >> i think the only way that happens is voters punish people for being obstructionist. i really do. and they can -- >> in 2010, you ran the health care bill through. that's what happened. >> this time, though, i think there's going to be a change. we live in a democracy, the public is the boss. >> you may take a couple of seats back from the house, but you're not taking the house and the senate's up in the air. >> i have my hopes. >> i know. i know. >> howard, edward, guys, thank you very much, we appreciate it. let's look at the markets this morning. right now, it seems people are waiting to see what happens with

that adp report. we're expecting that at 8:15. right now the futures up, but just barely. oil prices have been down slightly this morning. right now you'll see there's the european markets we're looking at again, we're going to be taking our cues from what we hear in half an hour's time. overnight in asia, you did see the nikkei down slightly. most of the markets are closed for major holidays. oil prices down to $91.22. take a look at the ten-year yielding 1.61%, the yield keeps getting crushed lower and lower. you'll see the dollar is up against the euro, 1.2914, and gold prices up $5.50. up to $1,781.10, we have a check on what's moving the markets this morning. not much until we get that adp report. plus, the weather channel taking new steps to keep you informed of winter storms. the details right after this. and a little later this morning, irene rosenfeld.

of course, the company formally known as kraft, she's going to be talking to us about the recent split and her prospects for her side of the business. a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. which can withstand over three and a half tons. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this. governor of getting it done. you know how to dance...

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question, would you take a snowstorm a little more seriously if it was named after a greek god? well, the weather channel thinks so and is going to begin naming major winter storms during the upcoming season. by naming the storms, the network feels it's going to be easier for folks to track the storm and get the word out on social media. here's a quick list of some winter storm names for you for 2012. factors like expected snowfall, temperature, and day of the week could play a role. i'm wondering where the kernan is on that risk. >> where did the gandolf on there? it's spelled differently. right? >> oh. >> you take yogi seriously? a storm called the yogi? >> doesn't seem like it would be that bad. the one above yogi, how would you read that one? >> let's get the list back up

there. i'm not going to -- >> that's what they're worried about. you would read that, he would read that ten er tennis. >> what else we got? magnus? >> nemo storm? >> no nemo -- >> but i think of finding nemo. >> it's q for quintanilla. >> it is. he is a "q." >> winter storms for 2012/2013. we'll be talking about these storms with these names, i would imagine. >> find them all right here. >> i wish they would name ibanez one of the storms. >> ibanez. >> oh, very good. very good. >> raul ibanez. >> very good. up next, we've got stocks on the move this morning ahead of the opening bell. check out what is still to come on the show, coming up at 8:00

eastern, we welcome irene rosenfeld. at 8:15 eastern, the adp report is out, a prelude to friday's jobs report. and at the bottom of the hour, chief white house correspondent chuck todd will be joining us from denver where the debate is tonight. at 8:40 eastern, investing ideas from founder and editor of interest rate observer, "squawk" will be right back. up next on "squawk box," don't start your day without knowing the names that will make you money. joe has your list of stocks to watch right after the break. [ mujahid ] there was a little bit of trepidation, not quite knowing what the next phase was going to be, you know, because you been,

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anything. this is a song by a group called the neighbor. if you're a fan of the neighborhood, you're a hoodlum. >> i like it. thank you for getting me up to speed. >> yeah, i'm going to get you up to speed on that. it's pretty new. pcs, the "wall street journal" reports that deutsche

telecom and metro pcs have approved a move to with the t-mobile unit. two sides acknowledged yesterday. any part of that? >> i believe it is. and if it isn't, it will be. >> okay. there you go. there you go. you don't often just copy what the "wall street journal" says, do you? >> never, never. but i believe the "wall street journal" might have been copying a german newspaper this morning. >> so you're copying the copier? >> let's just keep it real. a family dollar earned 75 cents a share in the first quarter. that hit street estimates, revenue also in line. best buy founder richard schultz and private equity firms are examining the results. microsoft was mentioned positively at bernstein, and nokia considering selling finland headquarters to raise cash. >> by the way, that story, not the confirmation of the pcs that they were talking.

>> is the deal book first? >> yesterday. >> you had to check that? you have nothing to do with that? >> no, i wanted to make sure. in my head, i thought there was, we had a story, but i didn't want to say it. >> wise idea to double check before. >> yeah. when we come back, we have a special interview with the ceo of mondelez international. our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. though all energy development comes with some risk, we're committed to safely and responsibly producing natural gas. it's not a dream. america's natural gas... putting us in control of our energy future, now. inspiration. great power. iconic design.

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she's the chairman and ceo of mondelez international, talking about the strength of the global snack business. and he was on ron paul's short list of candidates to take over the fed after chairman bernanke's term ends. and it's no surprise, critical of qe-3, he'll sound off on the long-term effects of the fed's latest round of easing. data on jobs, we'll get the adp employment data at 8:15 eastern time. the third hour of "squawk box" begins right now.

♪ welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernan along with becky quick and andrew ross-sorkin. we're working on it. trying to get a good one. >> jack and jill went up the hill, jill came down with 2.50. >> that's one of the jokes. there's one line after that we will not be saying on the air. >> our guest host this morning is jim tisch, president and ceo of the loews corporation. copping up this hour, irene rosenfeld, chairman of formally kraft. i think they still make oreos? >> oreos are still on the list. >> which had a big anniversary recently. >> you know how many likes oreos has on facebook? >> how many? >> 28 million. >> is that a lot? >> any dislikes? >> who doesn't like oreos? >> i'm just asking. i want both sides of the story.

>> at 8:15 eastern, we're going to get employment numbers from adp, which will set us up for friday. forecasters say the economy likely added 155,000 private payrolls last month. and i think for the big report on friday, looking at 145. at 8:30, we'll get you ready for tonight's debate. nbc news political director chuck todd, i think he's in the mile-high city right now. he'll join us. then at 8:40, we're going to talk -- did chuck go to miami? big game this weekend. i may have to talk to him about that. we're going to talk fed policy and politics with jim grant of grant's interest rate observer. first, though, becky has your morning headlines. let's get to some of that corporate news. american airlines says improperly installed clamps are to blame for seats coming loose. found four other boeing 757s with the same issue. it is now in the process of fixing those clamps. also, best buy founder

richard schultz is pressing forward with the possible $11 billion buyout of the retailer. schultze and four other retailers have started examining the books of the company. he is said to be negotiating individually on details of how much of his roughly 20% of the stake of the company he would contribute in a bid and what role he would play after a buyout. coming back in as ceo or not. let's get a check on the markets. things have been holding steady because we are waiting for a number that's 12 minutes away. that could give us an indication of what to expect on friday. right now the dow futures up by 12. same story across the pond if you look in europe. barely budging, waiting to see what happens with that number. asia markets, china closed for this week for the one-day holiday that lasts a week. right now you can see the nikkei did close. >> let's talk about kraft this morning. kraft foods completing a spinoff

of the north america grocery business. joining us now from the nasdaq in an exclusive interview is irene rosenfeld, the chairman and ceo it have newly named mondelez. i don't think we've had an opportunity to talk to you since you decided to pursue the spinoff. i thought it would be worth explaining the rationale for doing it. >> look, this is a terrific opportunity for us to launch a global snacking power house. we've got a fabulous roster of brands, they're the market leaders in the respective categories. we've got a very strong geographic footprint, particularly in developing markets and an advantaged route to market. and you put it together, we feel quite confident in our future. >> but you're not going to miss mac & cheese and oscar meyer? >> i'll miss all of those brands, but they're still a part of my portfolio. >> in that the grocery business typically trades at a lower

multiple. if this all goes well, your new business will trade at a higher multiple. what do you do with that stock? do you make acquisitions? how do you think about it? >> our biggest opportunity is for organic growth. we see tremendous opportunities to take a number of our global snacking platforms from one market to the next, to take markets like india and china, for example, and put new products through those routes to market. and so the organic opportunities are our biggest single opportunities for growth. but the other chance for us as we think about the future is to -- is for tack-on acquisitions, the opportunity to be able to supplement some of our capabilities, particularly in the developing markets. and so that would be a very good use of our currency, as well. >> irene, i know that wall street's been watching very closely to see what kind of brands and growth you're looking for, particularly in some of those developing nations. what are some of the brands that you'd be putting out let's say in india or somewhere? >> we start in a market like india, we start with a terrific footprint with cadbury dairy

milk. we've got about 80 shares there. and that's been the basis we've been able to launch oreo and tang. similarly in china, we've got a footprint in biscuit, we're able to launch gum on top of that. we have a strong starting position and then see the chance to stick our products additional categories on top of that foundation. >> your grocery business always threw off a lot of cash, always able to invest in different businesses, how does this change that? >> it really doesn't. we are quite prepared to be able to fund not only our dividend but also the kinds of tack-on acquisitions we talk about. >> one of your big shareholders is warren buffett. curious, did you have a conversation with him before you did this? and if so, what did he say? >> well, i don't ever talk about conversations with individual shareholders. what i would say is we were quite confident that we could create value for our shareholders with this transaction.

and i think the early results would bear that out. >> irene, what are you seeing in terms of food prices? food costs, i'm sorry. we've seen corn and soybeans go up dramatically over the past four or five months. how is that affecting your business and your margins? >> we're going to continue to see inflation in the low to mid-single digits. some things are going up as you said, other commodities are going down. cocoa and coffee going down, for example. the key for us is to ensure we're investing in our brands that as commodities go up, we are in a position to be able to price away those cost increases. >> we did a survey at my house for the most popular snack in the world after we saw this list. and i think it's true. i can't believe it, but the number one snack in the world, you know, you look for fritos or lays or any of those. you know what it is, irene? >> no, i don't. >> ritz, which was unbelievable

that -- it's a great brand name and, you know, we're putting on the ritz and things like that, i didn't know. you've got ritz and then oreos, that's got to be the best cookie. >> look, we have an incredible stable, ritz, oreos -- >> what do you use ritz for? i thought doritos and tostitos, but what? for cheese and crackers? maybe the ritz pieces with the peanut butter on the inside. >> that's good. >> yeah, maybe that's -- yeah, we're big fans here. in fact, i'm looking around here and we're done at 9:00, it's probably -- you can't get it over here that quickly here, probably. but next time. >> we'll get you some. >> and, irene, i just wanted to get your thoughts on the different models that people are approaching, the snack business with. you know, in 18 months from now, after now that you've done the

spin, there's been some talk that ultimately either business could become an acquisition target. how do you think about the different structures of these businesses? >> i think there's a very vast snacking space. it's $60 billion, $80 billion, and there's tremendous opportunity within that space for a number of different categories to play. we happen to have four of the leading categories in the space, and we feel quite confident that there's opportunity to grow as we think about the number of times the consumers around the world snack each day, we have a tremendous opportunity to provide snacks to boost consumers in the morning, to fuel them throughout the day, and then to provide treats in between. so our -- i think our portfolio is very well positioned to be able to capture a number of the different snacking occasions that are growing around the world. >> what do you think about the economy around the globe? we've had a lot of arguments coming in, or a lot of data points with china slowing down a little bit. we also get people who are

worried about qe-3, what that's going to mean in terms of food prices as jim touched on that before. on a broader scale, what can you tell us about what you see about the strength of the consumer and what you think might be happening from qe-3. >> well, there's no question the economy is challenged around the world. we're seeing certainly in markets like the u.s. and in europe, consumer confidence is low. unemployment is high, and that puts a lot of pressure on business. but the -- as we look at the developing markets, we are seeing gdp slowing down. price increases in response to deflating currencies. so there's no question the global economy is challenged. our approach in that context has been to ensure that we're providing a variety of options. from sizing standpoint across our categories to make sure we continue to invest in our brands so we are offering good value and continue to innovate. and that combination has allowed us to continue to be successful despite the fact that the

economy is challenged and will be for quite some time. >> irene, before we go, you've got to give us a pronouncer so everybody gets it right. it's mondelez. >> mondelez. >> there's the line. okay. >> irene, thank you for joining us, next time you've got to come in and bring us, put the order in advance for ritz and oreos. >> i will do that. >> you can twist the ritz things like the oreos. was that part of the synergy? >> same way you eat an oreo. >> good luck with it. add-on acquisition. what else you could -- >> we'll get a list together of our favorites. >> higher multiple stock. >> that name sounds like you're eating a chemical or something. >> when we come back, we're a few minutes away from the adp employment report the numbers and market reaction after this.

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welcome back to "squawk box," seconds away from that adp employment report. the person we're going to talk to. a very powerful bald man. steve liesman already has the numbers. and i always try to get your

eyebrow. your left eyebrow is going down. is this a good number. i can't tell. he never lets us know. he never lets us know the futures that you can see are basically -- what is it? >> 162,000 is the number for adp. >> i told you. your eyebrow. >> the eyebrow. >> what was the 25? that threw me off for a second. >> you said -- >> no, i was going to say 25 years without breaking an embargo. i have never led on anything. people give me numbers ahead of time, i never led on. don't play poker with me, joe. don't play poker with me. august was revised down to -- what was it revised down? by 17,000, i think, it was. any way, the nonfarm payroll was 119. and this was the big issue, we'll talk about some of the big differences, this would suggest an upward revision to the friday

number. but i've seen less responsiveness, i have to say, among economists. i think you have ira on in the 6:00 hour who says the adp has been the biggest volume generator. >> volume generator. he says the program is set up so they move on the headline. >> i'm going to show you a chart in a second. >> over time, it's right. >> right. and the instinct you guys have been talking about is it's been worse the last three months and we'll ask -- >> it was good for a couple of months. >> the average of the last three months. and i compare it to the private sector bls numbers. >> what is that estimate? >> the private sector is at 120, i think it is. 130. >> what's this nonfarm? >> the crazy thing is that when the unemployment numbers are reported on friday, the most important number will be the unemployment number. because that's what the politicians are going to talk about. and that number is going to be completely random based on participation. >> and it's incredibly volatile number, as well.

let's bring in the chairman of mac macroeconomic advisers. i want to put up this chart, i don't know if you can see it. but over the past three months, you guys have been heavy or above the bls number by 63,000, over six months, 48,000, and as joe suggested, a full year, it's just 21,000 heavy year-to-date and 12,000 over a full year. i just want to know if there's anything happening seasonally here. is there something to be concerned about where you guys have gone a little heavier than the bls numbers? >> true, we have been heavy, nothing unusual going on in either of our collections or the processing of data. but i'm sure your listeners know over the most recent benchmark year, now private non-farm employment grew more than initially reported. until all the data is in, it's hard to know the true picture here, though. but i believe as i have said for the seven years i've been doing this, there's incremental information in this data. it's a unique data set not

available anywhere else. >> let's take a look at some of the sectors here. and by the way, i think they're putting me on tv more now after the "wall street journal" article. i'm in the split screen now, and usually it would have been joe by himself. they have finally come to realize the important of baldness here. goods producing up 18,000, the service sector at 144,000, manufacturing coming in with some gains along with construction. and finance 7,000. so it looks reasonably broad-based here, joel. >> it does. and i think that the broad-based increase squares with some of the other data we're seeing, certainly housing looked like on the verge of a turn around here, the ism report of manufacturing, looked like employment was ticking up. >> right. >> the service economy needs to come along for the ride, though, or we're not going to get the recovery we want. >> let's take a step back. let's say they're off by 60,000 or off by 40,000 or 30,000.

fundamentally what we have is an economy that's growing jobs somewhere between 100,000 and 200,000, and the base is 130 million. so threading the needle here on how we're doing. joel, it seems to me what we have is okay job growth, but fundamentally not enough to make huge dents in the unemployment rate. maybe pretty much given what's going to happen, the unknown of what's going to happen with the participation rate to keep the unemployment rate about steady. >> i really do agree with that. for a steady participation rate, job growth of 130,000 a month or so would keep the unemployment rate constant, plus or minus 30,000 or 40,000. above or below that is essentially noise. in order to push the unemployment rate down convincing will i, we've got to have faster growth than we've been seeing. and we just haven't seen that. for the better part of this recovery. >> putting the argument in context, right? we're not talking about something -- you're suggesting growth is 250 or 300, it would

be an order of magnitude. give us an idea here of your sense of growth for the rest of the year and 2013. gdp growth. >> working on our forecast now looks to us that third quarter gdp growth would be between 1 1/2 and 2, same for fourth quarter growth. first half the next year, probably slow because we're going to jump off one of the bluffs along the fiscal cliff. faster growth toward the end of the year. but probably 2% growth or so over the next four quarters. >> joe, i forget how many years it's been or the lowest participation rate. and i don't know how many. and i'm just wondering, as the baby boomers get older and a lot of people retire, and that's what people are attributing it to whenever you say people are so despondent and give up and leave the workforce. many people say it's not it, demographically, there's a lot more older people finally retiring. what do you think the absolute lowest number is that we'll ever hit? where are we? did it go below 60?

how long can we keep -- how long can we keep seeing the participation rate go down which makes that unemployment rate look better? if you add it back in, we're still at 11%. >> can't be -- no. >> like in europe. >> it's zero in greece, i think, isn't it? the participation rate? >> i think it can go there. >> that's the tax-paying rate increase. so there's a strong debate in our profession about this. some of this decline is cyclical, some of it is demographic. the demographic part we understand pretty well. >> sooner or later, baby boomers are gone and there's -- >> there aren't, joe. >> there's not? >> no, think about the population, we're top heavy, so to speak. we have 55 or older -- >> can it go into the 50s? >> we can't figure out by -- >> greece, joe -- there's not a lot about economics, but we do know in 20 years the vast number of people 45 will be 65, but we

don't know the effect on the participation rate because what's happened to portfolios, by the way, some people are remaining in the workforce, some done well, may be getting out of the workforce. we could know the numbers, but we can't know the choices they'll make. >> if we go low enough, we can get the 5% unemployment rate with no new jobs if we lower the participation rate enough. >> that is correct. you could get the full employment with relatively modest growth in employment if the participation rate does not recover, continues to decline. but steve is right, we know the demographic trends. can influence the decision about how much longer to stay in the labor force or when to enter it. we know some are leaving permanently because of the economy, some young people are continuing in school because of the economy. those things could turn around. >> we've got to go. but, steve, i was 45, i'm only 55, 20 years later. i froze. jack ] after lauren broke up with me, i went to the citi private pass page

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welcome back to "squawk box," everyone. among the stories we are following this morning, mortgage applications jump to nearly 17% last week. that's according to new figures from the mortgage bankers association. that was driven largely by a surge in refinancing activity as mortgage rates dropped to record lows once again. see his reaction to that? also the boards of metro pcs and

telecon have approved a deal to merge. when we come back, the editor of the widely read investment journal, jim grant says the federal reserve is in the business of price fixing. he will join us at 8:40 eastern time. take a shot at andrew here. first, though, nbc news political director chuck todd will join us to get you up to speed before president obama and mitt romney face off tonight. "squawk" will be right back. ] for the dreamers... and those well grounded. for what's around this corner... and the next. there's cash flow options from pnc. solutions to help businesses like yours accelerate receivables, manage payments, and help ensure access to credit. because we know how important cash flow is to reaching your goals. pnc bank. for the achiever in you.

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welcome back to "squawk" this morning. a quick check at futures following that adp report that shows the u.s. economy added 162,000 non-farm jobs in september. however the prior month number was revised lower. you can see it there. dow jones looks like it would open up 26 points. mortgage applications jumped nearly 17% last week, the mortgage bankers association saying the increase was driven by a record low mortgage rate which prompted a surge in refinancing activity. the candidates are getting ready for the presidential debate being held in colorado. joining us from denver this

morning is nbc's chief white house correspondent our good friend chuck todd. >> becky! >> good morning to you, my friend. >> you didn't go to miami, you're from miami, that's it? >> reporter: are we going to start talking miami notre dame stuff? >> yeah. that's why i brought it up. >> reporter: that's really the most important thing all week. >> something else is happening tonight? >> reporter: notre dame week. >> do you have a madonna microphone on? >> he does. >> reporter: i do. >> don't stand up. don't show us a tattoo at the end of this, chuck. >> come on. >> he's got one. he knows. >> chuck, i know that things tightened up a little bit with the poll. >> reporter: they did. >> and it actually showed mitt romney is running neck and neck in florida? >> reporter: it is. look, there's two ways to divide up the battleground. there is the states that are just going to move with the direction of the race, right? which is florida, virginia,

colorado, nevada. these are the four closest states. coming up on the outside with wisconsin. and then you have sort of the next three in the battleground which are iowa, new hampshire, and ohio. but florida in particular -- if you look at the three we did. i call it the mega state of flova, you get what i did there f-l-o-f-g-a. any of the battleground states we've done all yearlong. so it's not just that he's down a point, he's probably in the best position there than any of the battleground states outside of north carolina. >> i keep hearing people say that mitt romney's advisers think he can't do this unless he wins both florida and ohio. you know these electoral college votes, you know the map better than about anybody, is that what you think too? >> no, i actually think they have a tough decision to make. and when you're in business and the business background of mitt romney, he's going to have a tough decision to make in a

week, and that is, do you pull out of ohio? do you move money out of ohio and into colorado and into a nevada? i painted you that battleground state scenario. if you -- he can get to 270 without ohio. >> how is he doing? >> it's looking like he does it this way. florida, north carolina, virginia, colorado, nevada, wisconsin. >> florida, say that again? florida, north carolina -- >> florida, north carolina, virginia, colorado, nevada, wisconsin. it's not easy. let me tell you, this happened. all right. let me tell you something what happened 12 years ago. same situation, same point in time, ohio became out of reach for al gore. he made the tough decision to publicly say i'm pulling my money out. ohio's a very expensive state. everybody screamed, oh, my god, it's over for gore. he threw all of his money in the florida basket and we know what happened. >> he didn't win.

>> reporter: no, but you know what? he made it a race. >> right. >> and is a dollar better spent now trying to make an eight-point gap in ohio four? or a dollar better spent trying to get one more voter out -- >> that'll ruin the flova. it sounds kind of like molva, doesn't it? >> we're going to go -- >> if you've got to go all five states there, what is the cost to do that on a relative basis to try to keep pressing it in ohio? >> reporter: well, ohio is -- here's the thing, more than just a financial class to ohio. first of all, there's so many medium to small-size to medium markets you spend in. there's that. there's the cost of traveling the state. it's not a state where you can pop in and get a state-wide pop. you come in colorado and do denver, grand junction, and colorado springs in one day, you've hit the entire state. much harder to pull that off in ohio. you go to vegas and reno, and

you've hit everything one day. wisconsin, you can do the same thing, ohio's hard to do in a day. it just -- so you look at the candidate time is almost as costly as the dollar itself in the month of october. >> chuck, let's go back a second. why do you think it is that in the past week or two romney has improved in the polls? and what do you think that portends for the future? >> well, it's a couple of things. if you look at our national poll, there's always been this enthusiasm gap between republicans and democrats. the president has more room to grow if you look just among registered voters. his lead actually expanded among registered voters. who's a likely voter which, of course, matters and the republican enthusiasm has been running about ten points higher than democratic enthusiasm. that hasn't closed. it's more even in some of the battleground stat but overall that hasn't closed. that accounts for some of the closure. right now you look at what romney's done and he's coalescing the vote he was

already going to get. the next step in this. you know, right now, for instance, i argue that obama actually has a commanding -- not all three-point leads are alike. it's actually a solid lead for the president, why? because 49's a winning number. 47, 44, would be a terrible lead for barack obama even though it'd be the same three points, if you get my drift. 49's a magic number in this race. so step one is coalescing republicans, and that is accounting, i think, for a lot of this increase in the last week. step two we'll find out after the debates, does he start peeling off the soft obama supporters. that's going to be the harder step, but that's what the debates -- >> it's weird we're talking three, two, talking one. and this is the nbc poll, but then you've got rasmussen and gallup. but it's all you've got. >> obviously we spend a lot more

money polling than scott rasmussen does. >> he was right, though, the last couple of elections. >> not right at the end. >> yeah. >> it's what happens in the middle sometimes it seems a little bit haywire. all my point is on this is i -- we have, the two people we have conduct nbc "wall street journal," they poll for politicians, and why does that matter? because they're not polled to -- they're polled to get it right. if they're not, they don't get clients. so i'll take -- i'll take that. >> but you have 200 million people and you've got polls under 2,000 people. and i know we have statistical analysis and we talk about margins of error and everything. >> i hear you. i just -- i defend -- i could tell you. we spend a lot of money. and look, you guys use the same pollsters we do. the cnbc poll. you guys know these guys are the gold standard. we spend so much money. it is unfair -- i hate the idea that they are -- >> do you think that other --

>> rigorously done has to be compared to what is in some cases, you know, slop. >> do you think other polls are biased? take our poll out of it. >> reporter: do i think some polls -- biased is not the right word. do i think some people aren't accounting for every possible statistical anomaly you need. >> you think they're not purposely accounting for every statistic? >> i think there's financial constraints. >> okay. >> that is the issue. it costs a lot of money to call cell phones, for instance. rasmussen doesn't do any cell phones. >> the article in the "wall street journal" said they surveyed 1,000 people. 1,000 registered voters and 832 of them were likely voters. >> right. >> do you believe the turnout is going to be 82% or 83%? >> well, here's what you do. you have 1,000 registered voters, not 1,000 of adults. so it's 80% of adults are registered voters and 80%

essentially of registered voters or likely voters. that puts you in the 60% range of turnout. do i think turnout's going to be somewhere between 56% of all voting age adults and 64%? yes. do i think it's going to be a little lower than 60%? yes, i do. but if you look at our likely voter models, this is how you become a likely voter, by the way. this is how in our poll, you have to say you've voted in either '08 or '10 and tell us that on a scale of one to ten, you are a nine or ten in being interested in this election. and that's how we get our likely voter sample. so that's how you screen for this stuff. and it's a model that's worked pretty well for us over the years. >> people that vote three or four times each year are really -- even likelier. >> very likely. >> reporter: that's very likely. that's the very likely. you know, we don't -- we're not polling the graveyards very well. >> well, that's another thing.

and so you don't care -- >> there's always a margin of error in graveyards. >> you don't care whether miami wins. are you a miami fan? >> i'm a huge miami fan and i hate notre dame. >> nbc broadcasts the n d game, chuck. >> reporter: i know, it kills me. and i tell you, the deal he cut. >> call me. we've got to talk. you don't hate notre dame, chuck. >> reporter: oh, no, i know i'm on the wrong side of god on this. i get it. >> and nbc more importantly. >> i'm sorry. it's all about the "u." >> thank you. we'll see you a little bit later. and thank you very much for that. our programming note, by the way, cnbc's coverage of the first presidential debate begins tonight at 8:00 p.m. eastern time. and tomorrow on "squawk box," we have a huge lineup to break down tonight's debate and a look ahead to friday's complete employment report. our guest will be arianna, she launched the national bipartisan

jobs initiative. we're going to talk to walter isaacson the author of the best-selling biography about steve jobs, jack dorsey, and howard schultz. tomorrow starting at 6:00 a.m. really ominous music. ♪

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he's been a critic of the accommodative monetary policy. he's also the author of five books. five books including mr. market, miscalculation, here's how i would argue this. and not me. but here's if i was trying to debate the point, i'd say, do a mandate. number one for jobs, it's a no-brainer so they can do something so they can hide

behind that. two, if it's price stability, they're below their inflation target, so even on the second mandate, they could justify what they're doing. so on both mandates, they've got total political cover they're doing the right thing. and you'd actually have to think about whether what's going to happen in the future to not do what they're doing. . you'd have to be responsible and worried rather than just satisfying their dual mandate. >> is that your best shot? >> yeah. i don't want them -- i agree with you. >> joe, they don't have -- they don't actually meet the common sense mandate. >> that's what i mean. >> we are on the ph.d. standard. and what we have is -- >> is that piled higher and deeper? >> who inner pose themselves between us and what we call the price -- >> wouldn't you do it if you were them? to cover your butt with the dual mandate? to cover yourself and tell you why you did it. >> i'm in the non-covering-one's butt -- i'm in exposing those who try to cover their line of work.

>> the fed was instituted 100 years ago to supply liquidity to the banking system in times of seasonal and cyclical difficulty, period. that was it. no improving the gdp, no managing the dynamic equilibrium model if you please. >> yes. >> no doing the stuff they do on the pretext that they are lifting up our living standards and improving our lives. now then, and it seems to me the time has come for the politicians, perhaps tonight, where they say let us investigate the possibility of returning to capitalism in finance. the fed in effect was given stewardship over the 36-inch yard. 36 inches make a yard. what they're doing, oh, 36 inches is difficult in these times of ours, how about 34 3/8 inch yard this quarter and then we'll check the dynamic

equilibrium model and see if, perhaps, we can do with a 31-inch yard. that's what charlie evans is saying, in effect, they are seeing into the future, they say, and improving the future, but before it can come to pass. d tt succeeding. >> i think 34 -- if you're going to measure a yardstick in another realm, it is 34.3, isn't it? >> no, it's 36. >> it's relativity. length contraction time -- >> that's part of the problem. that's part of the problem. >> you've heard of length contraction and time dilation, right? >> we should talk in simple terms, joe. >> not general relativity. but einstein made a fortune in physics. so you're saying that -- i mean at 8%, you're not feeling the pain of all these people that are out of work. and we've got no fiscal solutions, we've got a deadlocked congress, congress can't do anything, they're the only game in town.

that's got to help. >> empathy is not the way forward. the way forward is to think through the problem. >> it is staggering that they think they need to make -- >> they have an atlas complex, which is not helping. >> they should be shrugging. >> it's hindering. >> ben bernanke sets up as the world's leading authority on the 1930s. why do we talk about nonstop about the 1930s? are they necessarily relevant? no, i answer my own question. let us allow markets to clear. how is that just for a start? >> so can a politician allow that? >> yes. >> i mean, let's talk about this a second. the politicians are looking at 8% unemployment rates. they've got to look like they're trying do something to bring that down. after all, they're -- >> but they're not. >> well -- they -- they haven't approved of any real legislation. so they're badgering the feds to do something about it. >> right. well, jim, you work for a

living, right? >> i think so. >> you run businesses. does the uncertainty about what they are going to do next quarter with respect to the cost of money, with respect to qe end? does that help? does that embolden

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welcome back to "squawk" this morning. let's go down to jim cramer at the new york stock exchange. you were up at 2:28 in the morning. becky was up. she had a reason to be up. what were you doing tweeting away? >> problem sleeping. it's kind of like going through a 90-hour period of no sleep. it's starting to get to me. >> jim, i thought i was winning. i was so excited when i was writing my tweet. i had posted and you had had posted two minutes before me. >> someone dared us to post at 2:30 so of course i'm going to post at 2:29. >> you posted at like 2:27.

not 2:29. >> i did not set the alarm. that's what is scary. >> i didn't either. 2:19 i woke up. >> you remind me of like the shining or something. are you having trouble sleeping? you're just up all the time? you're not nursing. becky is nursing. >> all work and no pay. >> jim, there's a couple of issues on the table this morning, including this deal between deutsch telecom. i don't know if you have views on that or the adm numbers. what are you thinking about? >> sprint has been down for the last couple of days. metro pcs and t-mobile, this is very good for t-mobile. i would have expected sprint to be down even more. why? i know they have to make a bid here. if they let this go, you could conceivably see sprint left behind. so this isn't done yet, is what i'm saying.

>> okay. we will keep our eyes on that stock as well. see you in moments. >> thank you. coming up, more from our guest host, jim tisch. we're going to give him the last word coming up. for many, nexium helps relieve heartburn symptoms caused by acid reflux disease. osteoporosis-related bone fractures and low magnesium levels have been seen with nexium. possible side effects include headache, diarrhea, and abdominal pain. other serious stomach conditions may still exist. talk to your doctor about nexium. and those well grounded. for what's around this corner...

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>> announcer: tomorrow on "squawk box," tense moments and the scoreboard after the first of three presidential debates. we'll talk to political strategists and gauge the market's reaction to tonight's main event. watch ""squawk box"" starting tomorrow at 6:00 a.m. eastern. >> monsanto expecting a bigger fourth quarter loss due to softer corn and cotton seed sales. >> our guest, tim, the jobs number that we got from adp was a little better than expected. how do you add it all up?

>> i think this is what happens in a 2% growth economy. we're seeing s&p earnings now are unchanged year over year. so i think the reason for the stock market rally is because of the quantitative easing going on and people can't put their money anyplace that is going to earn them something. so this is what we're relegated to. >> and as jim cramer said, you can't fight the fed. >> can't fight the fed. the fed has 2 $1/23, trillion going higher. i think the problem is going to be when quantatative easing is over when the economy has to improve and they are unwinding -- >> how much gold do you have? >> enough to have bragging rights but not enough to make an enormous difference. but i've had it for about seven or eight years now. >>